Slashdot Mirror
Debt Reduction Super Committee Fails To Agree
Hugh Pickens writes "VOA reports that the latest effort to cut the U.S. government's debt apparently has ended in failure as leaders of the special 12-member debt reduction committee plan to announce that they failed in their mandate from lawmakers to trim the federal debt by $1.2 trillion over the next decade. Democrats and Republicans blame each other for the collapse of the effort. 'Our Democratic friends were never able to do the entitlement reforms,' said Republican Senator Jon Kyl. 'They weren't going to do anything without raising taxes.' Democratic Senator Patty Murray, one of the committee's co-chairs, says that the Republicans' position on taxes was the sticking point. 'The wealthiest Americans who earn over a million a year have to share too. And that line in the sand, we haven't seen Republicans willing to cross yet,' Now in the absence of an agreement, $1.2 trillion in across-the-board spending cuts to domestic and defense programs are set to take effect starting in January, 2013, and the lack of a deal will deprive President Barack Obama of a vehicle for extending a payroll tax cut and insurance benefits for unemployed Americans, which expire at the end of the year." (Though the official deadline for the committee's hoped-for plan is tomorrow — the 23d — they were to have provided it for review 48 hours prior.)
Raise taxes and cut spending. Do both. You can't agree?
The Republicans have signed a pledge that they will never vote to raise taxes on anybody for any reason whatsoever. If they violate that pledge, the head of the organization who created it can and will ensure they lose their seat by cutting off their campaign funding. So they really can't agree to raise taxes.
When it comes to spending cuts, the big-ticket items are Social Security, Medicare, Medicaid, and the military. Any serious cuts need to affect one of those 4 items. The Democrats have been elected for decades with pledges to protect Social Security, Medicare, and Medicaid at all costs - it's their party's signature program for the last 75 years or so, so they really can't cut any of those. The Republicans have been elected for decades with pledges to protect military manufacturing jobs in their district, so they really can't cut any of those.
So in short, no they really can't, not without betraying everything they claim to stand for.
I am officially gone from
No. Tax increases are only a temporary solution at best..
Why? I'm German, and we live just fine with higher taxes (and free healthcare, truly public education, etc.)
Richard Nixon was denounced as a fascist by the baby boomers in the late 60s. What's he remembered for now other than Watergate? He opened diplomatic relations with Chinese Communists, instituted wage and price controls by the government to check inflation, and ended the war in Vietnam. He would be thrown out of the Republican Party today for being more liberal than Bill Clinton.
It is amazing how much the Republicans, and those same boomers, have shifted to the right.
I was actually impressed with the idea of automatic spending cuts, especially with Republicans putting their sacred cow of Defense spending on the table. I was certain the committee wouldn't reach a deal since they previously rejected the Democrat's offer of 3 to 1 spending cuts to revenue increases and with Obama finally showing some backbone, so I was really curious to see how the automatic cuts would go into effect legislatively.
Turns out the next step will be making sure those cuts don't happen. Because, while Congess can't agree on how to cut spending, they can apparently agree on how to keep spending in place.
I wish America had a system that allowed viable third party candidates... but, as it stands now,Americans will have to choose between corrupt and corrupter in 2012. We are so screwed.
i ~ Celebrating Science, Cyberspace, Speculation
Anyone who thought this committee would produce anything is completely out of touch with reality.
The United States government, world-wide banks and foreign governments all rely on our debt as a safe hedge against inflation in their own countries. Our debt is sold as inflation-protected treasury bonds that growing and stagnant economies alike buy to make sure catastrophes in their own economies/banks don't wipe out them out. And the need for the debt is increasing with increased world-wide trade, off-shore production and international humanitarian efforts (earthquakes, floods, etc.), hence why the treasury bond rates have declined by so much.
If the US government were to reduce the amount of debt it produces, treasury bond rates would increase not only increasing the cost of lending for consumers and banks, but also limiting the liquidity of money being moved around to hedge international risks which in turn would probably create another massive recession.
Unfortunately, the only way to fix things is to reduce the need for others to buy our debt. Either by helping to improve foreign economies (so they need less debt to hedge against their own inflation/deflation), improving the economy in our own country (so our people need less debt) by creating jobs or reducing taxes on those with the most debt (while giving incentives to reduce their debt), plug holes in tax code and banking regulations to stop rampant speculation on markets (that causes national and international instability as well as a massive amount of lending when investors buy things on margin), or reducing the over-accumulation of wealth into fewer hands (a few people with lots of money causes massive risks).
The first two needs require a massive amount of spending and the last two require a major overhaul of the tax code system, banking regulations and tax rates that give incentives for executives to leave money in the company and hire more people (like the income tax rates of the 1930s-50s and corporate tax rates aimed at median income targets). All are necessary, but it's very unlikely anymore than two will ever happen at once because of the two party political system in power.
Since one particular party doesn't want any increased spending and no tax increases at all, the economy is going to continue to suffer and if things aren't corrected the US' debt will become a worthless hedge for others that will lead to a run on the bank to turn it in, causing an economic collapse unlike the world has ever seen.
By the same token, everyone can agree that spending cuts are necessary. Except the Dems of course. Note that the biggest proponent of NOT cutting Defense Spending is Obama's Secretary of Defense, not the Republicans
Hold on...this isn't the Secretary of Defense suggesting a spending cuts? What about Obama suggesting Defense Spending Cuts Here. It seems your information is wrong. Every proposal that the Democrats have made included defense spending cuts. It was the Republicans who refused to cut defense spending.
The rest of your post I completely agree with though.
That's because the public overwhelmingly does not want them to do so. This is known as "listening to your constituents."
The GOP have listened to Grover Norquist, who is ONE constituent.
It kind of falls in nicely with the 1% vs. the rest of us issue that is pretty clearly established as our biggest political issue of this era.
Clinton did. In fact, the math and the facts overwhelmingly demonstrate that Bush's tax cuts on the rich are the primary structural driver of our deficit. The other being the wars that Bush dragged us into for no reason.
This is also known as a lie. Social Security could be made solvent for another 75 years by simply raising the cap on taxes for those making more than 106k. Medicare can be made solvent by ending the ridiculous conditions imposed on it by Bush's part D abomination that the government cannot negotiate for lower drug prices.
. . . so you need to steal my Social Security benefits to pay off Bush's wars? To hell with that bullshit. I EARNED MY MOTHERFUCKING SOCIAL SECURITY. That money IS MINE. I am not giving it up so that some gold-plated CEO can have his second motherfucking yacht.
The shame is that the Republicans are listening to Grover Norquist and very obviously not hearing a single word the public has to say, which is, in a nutshell:
Democracy may be inconvenient to your ideology, but we are the majority and you are not. If you have a smidgeon of respect for it (which by your previous posts I can tell, you really don't) you will accept that an deal with it.
But, if like many Republicans you actually do NOT respect Democracy, the great thing is you are still going to just have to gag on that thing, and fucking deal with it. I do not care. Your movement and their ridiculous opinions do not matter anymore in US politics. The truth of this will become clear to you next year when we the 99% take your unearned power and rip it right the fuck out of your hands.
Better get used to that.
One day I feel I'm ahead of the wheel / the next it's rolling over me / I can get back on / I can get back on